News Ticker

COVID-19 News Round-up for July 17

Credit: AGC of Colorado

Economic News 

Hotel Outlook Worsens, Again 

Despite some encouraging numbers a few weeks ago, the increasing spikes in COVID-19 numbers have once again created a downturn in the U.S. hotel industry, according to a recent report in National Real Estate Investor. (Source: National Real Estate Investor) 

Office Markets Preparing a ‘New Normal’ Future 

As offices re-populate, companies and building owners are examining issues of social distancing, amenity packages, and interior design. Technology companies that relied on closely spaced open work areas and social amenities will face significant changes, while traditional configurations will benefit from the social distancing that was designed into their current layouts. There will still be challenges related to conference room activities. (Source: National Real Estate Investor) 

Valley CRE Lending Improving for Some Product Types 

Adam Finkel, principal for Tower Capital, said the firm has still been active in refinancing deals due to low interest rates, while “about a dozen” loans the firm was working on for hotels were canceled. However, construction loans and financing to convert former hospitality buildings into residential use have remained strong, and Finkel said he expects more activity in those types of conversions as a result of the pandemic’s effect on the hospitality industry. (Source: Phoenix Business Journal) 

Tucson Housing Market Slumps 

A recent national housing market report by Clever Real Estate shows Tucson at #3 for markets showing the greatest decreases in demand. Since last year, the supply in Tucson has decreased by over 25 percent in terms of total number of homes for sale and newly listed homes, according to Redfin. And, while overall demand was relatively low throughout the year, the Tucson housing market has been on a steady decline since early April, with a large drop in June. (Source: AZ Big Media 

Pandemic Could Cause Urban Housing Vacuum, Rural Boom 

The way the COVID-19 pandemic is changing daily life may drive the population away from big cities into small towns, with businesses following, which will change demand for real estate, according to a report from Fitch Ratings. City center real estate may take a hit since remote work-from-home arrangements make it possible for office workers to live further away from the office. (Source: GlobeSt.com) 

Arizona, Tucson Hotel Markets Taking Big Hit 

During April, which thus far has been the most affected month of the year, hotels in Arizona, including the Tucson area, experienced a RevPAR decrease of approximately -82 percent according to STR. Occupancy declines in April averaged -66 percent, while ADR declines averaged -48 percent. On a nominal basis, most hotels ended the month with an occupancy level near 25 percent, an ADR of $71, and a RevPAR level of $17. Unfortunately, the shutdowns nationwide came during high season for Arizona hotels, further exacerbating the impact for Tucson hoteliers. (Source: HVS) 

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